UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.     )

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COMCAST CORPORATION

 

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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Notice of 2010 Annual Meeting of Shareholders of Comcast Corporation

 

 

All shareholders are cordially invited to attend the meeting. Travel directions can be found on page 62 of the attached proxy statement. At the meeting, you will hear a report on our business and have an opportunity to meet our directors and executive officers.

 

Only shareholders of record on March 11, 2010 may vote at the meeting. Attendance at the meeting is limited to shareholders of record and one guest per shareholder. If the meeting is adjourned because a quorum is not present, those shareholders who attend the reconvened adjourned meeting shall constitute a quorum for the purpose of acting upon the matters presented at the adjourned meeting pursuant to the rules described in “Voting Securities and Principal Holders — Outstanding Shares and Voting Rights” in the attached proxy statement.

 

We are pleased to take advantage of the Securities and Exchange Commission rule allowing companies to furnish proxy materials to their shareholders via the Internet. We believe that the e-proxy process expedites shareholders’ receipt of proxy materials and lowers the cost and reduces the environmental impact of our annual meeting of shareholders. Accordingly, we have mailed to our shareholders of record and beneficial owners a Notice of Internet Availability of Proxy Materials containing instructions on how to access the attached proxy statement and our Annual Report on Form 10-K via the Internet and how to vote online. The Notice of Internet Availability of Proxy Materials and the attached proxy statement also contain instructions on how you can receive a paper copy of the proxy materials. If you elect to receive a paper copy of our proxy materials, our 2009 Annual Report on Form 10-K will be mailed to you along with this proxy statement.

 

The Notice of Internet Availability of Proxy Materials is being mailed to our shareholders beginning on or about April 9, 2010. The attached proxy statement is being made available to our shareholders beginning on or about April 9, 2010.

 

Your vote is important. Please vote your shares promptly. To vote your shares, you can use the Internet as described in the Notice of Internet Availability of Proxy Materials in the attached proxy statement and on your proxy card; call the toll-free telephone number as described in the attached proxy statement and on your proxy card; or complete, sign and date your proxy card and return your proxy card by mail.

 

ARTHUR R. BLOCK

Secretary

 

April 9, 2010

TABLE OF CONTENTS

 

 

* * *

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on May 20, 2010: Our proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2009 are available at www.proxyvote.com.

 

PROXY STATEMENT

 

 

Who May Vote

 

Holders of record of Comcast Corporation’s (“Comcast,” the “Company” or “our,” “we” or “us”) Class A and Class B common stock at the close of business on March 11, 2010 may vote at the annual meeting of shareholders. Holders of our Class A Special common stock are not entitled to vote at the meeting. This proxy statement is made available to holders of Class A Special common stock for informational purposes only. The Notice of Internet Availability of Proxy Materials is being mailed to our shareholders beginning on or about April 9, 2010. This proxy statement is being made available to our shareholders beginning on or about April 9, 2010.

 

How to Vote

 

You may vote in person at the meeting or by proxy. We recommend that you vote by proxy even if you plan to attend the meeting. You can always change your vote at the meeting.

 

How Proxies Work

 

Our Board of Directors (the “Board”) is asking for your proxy. Giving us your proxy means you authorize us to vote your shares at the meeting in the manner you direct. You may vote for all, some or none of our director candidates. You may also vote for or against the other proposals or abstain from voting.

 

You can vote by proxy in any of the following ways:

 

 

If you vote via the Internet or by telephone, your vote must be received by 11:59 p.m. Eastern Daylight Time on May 19, 2010.

 

If you give us your signed proxy but do not specify how to vote, we will vote your shares in favor of the director candidates, the ratification of the appointment of our independent auditors, the approval of our 2006 Cash Bonus Plan and against the three shareholder proposals.

 

If you hold Class A common shares in the Comcast Corporation Retirement-Investment Plan or the Comcast Spectacor 401(k) Plan and vote, your shares will be voted as you specify on your proxy card. If you hold Class A common shares in the Comcast Corporation Retirement-Investment Plan or the Comcast Spectacor 401(k) Plan and do not vote, or you sign and return your proxy card without voting instructions, the respective plan trustee will vote your shares in the same proportion on each matter as it votes shares held in the respective plan for which voting directions were received. To allow sufficient time for voting by the plan trustee, your voting instructions must be received by May 17, 2010.

Notice of Electronic Availability of Proxy Materials

 

Pursuant to the rules of the Securities and Exchange Commission (“SEC”), we are making this proxy statement and our Annual Report on Form 10-K available to our shareholders electronically via the Internet. Accordingly, in compliance with this e-proxy process, on or about April 9, 2010, we mailed to our shareholders of record and beneficial owners a Notice of Internet Availability of Proxy Materials containing instructions on how to access this proxy statement and our Annual Report on Form 10-K via the Internet and how to vote online. As a result, unless otherwise required, you will not receive a paper copy of the proxy materials unless you request one. All shareholders will be able to access the proxy materials on a website referred to in the Notice of Internet Availability of Proxy Materials and in this proxy statement and to request to receive a set of the proxy materials by mail or electronically, in either case, free of charge. If you would like to receive a paper or electronic copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials. See “Electronic Access to Proxy Materials and Annual Report on Form 10-K” below for further information on electing to receive proxy materials electronically. By participating in the e-proxy process, we will save money on the cost of printing and mailing documents to you and reduce the impact of our annual meeting of shareholders on the environment.

 

Matters to be Presented

 

We are not aware of any matters to be presented other than those described in this proxy statement. If any matters not described in this proxy statement are properly presented at the meeting, the proxies will use their own judgment to determine how to vote your shares. If the meeting is postponed or adjourned, the proxies will vote your shares on the new meeting date in accordance with your previous instructions, unless you have revoked your proxy.

 

Revoking a Proxy

 

You may revoke your proxy before it is voted by:

 

 

Attending in Person

 

Attendance at the meeting is limited to shareholders of record and one guest per shareholder. For safety and security reasons, video and audio recording devices will not be allowed in the meeting. All meeting attendees may be asked to present a valid, government-issued photo identification, such as a driver’s license or passport, before entering the meeting, and attendees will be subject to security inspections.

 

Please bring an admission ticket with you to the meeting. Shareholders who do not present an admission ticket at the meeting will be admitted only upon verification of ownership. An admission ticket is attached to your proxy card. Your Notice of Internet Availability of Proxy Materials will also serve as an admission ticket.

 

Alternatively, if your shares are held in the name of your bank, brokerage firm or other nominee, the voting instruction form received from your bank, brokerage firm or other nominee will serve as an admission ticket or you may bring to the meeting an account statement or letter from the nominee indicating that you beneficially owned shares on March 11, 2010, the record date for voting, which also will serve as an admission ticket.

 

Registered shareholders may also request a replacement admission ticket by sending a written request to Comcast Corporation, in care of Broadridge Financial Solutions, Post Office Box 9160, Farmingdale, NY 11735.

Webcast of the Meeting

 

We are pleased to offer an audio webcast of the matters to be voted upon at the annual meeting of shareholders. If you choose to listen to the audio webcast, you may do so via a link on our website at www.cmcsa.com or www.cmcsk.com.

 

Conduct of the Meeting

 

The Chairman of our Board (or any person designated by our Board) has broad authority to conduct the annual meeting of shareholders in an orderly manner. This authority includes establishing rules of conduct for shareholders who wish to address the meeting, including limiting questions to the order of business and to a certain amount of time. Copies of these rules will be available at the meeting. To ensure that the meeting is conducted in a manner that is fair to all shareholders, the Chairman (or such person designated by our Board) may also exercise broad discretion in recognizing shareholders who wish to speak, in determining the extent of discussion on each item of business and in managing disruptions or disorderly conduct.

 

Additional Information on the Annual Meeting of Shareholders

 

If you have questions or would like more information about the annual meeting of shareholders, you can contact us in any of the following ways:

 

 

Arthur R. Block, Secretary

Comcast Corporation

One Comcast Center

Philadelphia, PA 19103

 

Contacting Our Board, Board Committees or Directors

 

Our Board has provided a process for shareholders to communicate with its members. Shareholders and other interested parties who wish to communicate with our directors may address their correspondence to the Board, to the Presiding Director, to any other particular director, to the independent or nonemployee directors or to any other group of directors or committee of the Board, in care of Arthur R. Block, Secretary, Comcast Corporation, at the address given above. You may also send an e-mail in care of the Chair of the Audit Committee of the Board by using the following e-mail address: audit_committee_chairman@comcast.com. All such communications are promptly reviewed and, as appropriate, forwarded to either the Board, the relevant committee(s) of the Board or individual or group Board or committee member(s) based on the subject matter of the communication.

 

Corporate Governance

 

Our Board has adopted corporate governance guidelines. These guidelines address items such as the standards, qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, we have a code of ethics and business conduct that applies to all our employees, including our executive officers, and our directors. Both the guidelines and the code are posted under the “Governance” section of our website at www.cmcsa.com or www.cmcsk.com. The charters of each of the Board’s Audit, Compensation, Finance and Governance and Directors Nominating Committees are also posted on our website. More information on our Board and its committees can be found beginning on page 11.

 

Outstanding Shares and Voting Rights

 

At the close of business on March 11, 2010, the record date, we had outstanding 2,064,302,555 shares of Class A common stock, 747,111,271 shares of Class A Special common stock and 9,444,375 shares of Class B common stock.

 

On each matter to be voted on, the holders of Class A common stock and Class B common stock will vote together. As of the record date, each holder of Class A common stock is entitled to 0.1373 votes per share and each holder of Class B common stock is entitled to 15 votes per share. Holders of Class A Special common stock are not entitled to vote at the meeting.

 

All of the information in this proxy statement regarding shares underlying option and stock awards and option exercise prices reflects a three-for-two stock split in the form of a 50% stock dividend, which was paid on February 21, 2007 to shareholders of record on February 14, 2007.

 

In order to carry on the business of the annual meeting of shareholders, we must have a quorum. This means that, for each matter presented, shareholders entitled to cast a majority of the votes that all shareholders are entitled to cast on that matter must be represented at the meeting, either in person or by proxy. If the meeting is adjourned for one or more periods aggregating at least five days due to the absence of a quorum, those shareholders who are entitled to vote and who attend the adjourned meeting, even though they do not constitute a quorum as described above, will constitute a quorum for the purpose of electing directors at such reconvened meeting. If the meeting is adjourned for one or more periods aggregating at least 15 days due to the absence of a quorum, shareholders who are entitled to vote and who attend the adjourned meeting, even though they do not constitute a quorum as described above, will constitute a quorum for the purpose of acting on any matter described in this proxy statement other than the election of directors.

 

The director candidates who receive the most votes will be elected to fill the available seats on our Board. Approval of the other proposals requires the favorable vote of a majority of the votes cast. Except as noted below with respect to broker nonvotes, only votes for or against a proposal count for voting purposes. Abstentions, withheld votes in regard to the election of directors and broker nonvotes count for quorum purposes. Broker nonvotes occur on a matter when a bank, brokerage firm or other nominee is not permitted by applicable regulatory requirements to vote on that matter without instruction from the owner of the shares and no instruction is given. Absent instructions from you, your broker may vote your shares on the ratification of the appointment of our independent auditors, but may not vote your shares on the election of directors, the approval of our 2006 Cash Bonus Plan or the adoption of the three shareholder proposals.

 

Principal Shareholders

 

This table sets forth information as of February 28, 2010 about persons we know to beneficially own more than 5% of any class of our voting common stock.

 

 

 

 

 

Security Ownership of Directors, Nominees and Executive Officers

 

This table sets forth information as of February 28, 2010 about the amount of common stock beneficially owned by our current directors (all of whom are also nominees for director), the named executive officers listed in the “Summary Compensation Table for 2009” found on page 40 and our directors and executive officers as a group.

 

 

 

*    Less than 1% of the outstanding shares of the applicable class.

 

 

 

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Our directors and executive officers file reports with the SEC pursuant to Section 16(a) of the Exchange Act indicating the number of shares of any class of our equity securities they owned when they became a director or executive officer and, after that, any changes in their ownership of our equity securities. We have reviewed copies of such reports and written representations from the individuals required to file the reports. Based on our review of these documents, we believe that all filings required to be made by our reporting persons for the period January 1, 2009 through December 31, 2009 were made on a timely basis, except that Mr. Ralph J. Roberts, a director, made a gift of shares of Class A Special common stock on December 22, 2009 that inadvertently was not reported in a timely manner; this transaction was subsequently reported on a Form 5.

 

Based on the recommendation of our Board’s Governance and Directors Nominating Committee, our Board has nominated the director candidates named below, all of whom currently serve as our directors. All of our directors are elected annually.

 

If a director nominee becomes unavailable before the annual meeting of shareholders, your proxy authorizes the people named as proxies to vote for a replacement nominee if the Governance and Directors Nominating Committee names one.

 

Our Board has determined that each of our nonemployee directors, other than Mr. Bonovitz, who is married to a first cousin of Mr. Brian L. Roberts, is independent in accordance with the director independence definition specified in our corporate governance guidelines, which is posted under the “Governance” section of our website, www.cmcsa.com or www.cmcsk.com, and in accordance with applicable NASDAQ Global Select Market rules. In making its independence determinations, our Board considered transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and affiliates, including those reported under “Related Party Transaction Policy and Certain Transactions” below. The Board also considered that we and our subsidiaries in the ordinary course of business have during the current and past three fiscal years sold products and services to, and/or purchased products and services from, companies at which some of our directors are currently executive officers or a controlling shareholder. In each case, the amount paid to or received from these companies was below 1% of the recipient company’s total consolidated gross revenues, which is far below the 5% limit prescribed by NASDAQ Global Select Market. Following the annual meeting of shareholders, if all director nominees are elected to serve as our directors, independent directors will constitute more than two-thirds of our Board.

 

OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.

 

We believe that our Board as a whole possesses the right diversity of experience, qualifications and skills to oversee and address the current issues facing our company. In addition, we believe that each of our directors possesses key attributes that we seek in a director, including strong and effective decision-making, communication and leadership skills. Set forth below is additional information about the experience and qualifications of each of the nominees for director.

 

Brian L. Roberts, 50, has served as a director since March 1988, as our President since February 1990, as our Chief Executive Officer since November 2002 and as our Chairman of the Board since May 2004. As of December 31, 2009, Mr. Roberts had sole voting power over approximately 33% of the combined voting power of our two classes of voting common stock. He is a son of Mr. Ralph J. Roberts. Mr. Roberts is also a director of Comcast Holdings Corporation and the National Cable and Telecommunications Association (“NCTA”), the principal trade association of the cable television industry, and he is Chairman of CableLabs, the cable industry’s research and development organization. Within the past five years, Mr. Roberts was a director of The Bank of New York Mellon until April 2007. We believe that Mr. Roberts’ extensive experience and leadership in the cable, phone, wireless, Internet and programming industries, including as our Chief Executive Officer and President and through his involvement with NCTA and CableLabs, render him qualified to serve as one of our directors.

 

Ralph J. Roberts, 90, our Founder, has served as a director since March 1969 and is Chairman Emeritus of the Board. He served as the Chair of the Executive and Finance Committee of the Board, now the Finance Committee of the Board, from November 2002 until December 2008. From March 1969 to February 1990, Mr. Roberts served as our President, and from November 1984 to November 2002, he served as our Chairman of the Board. He is the father of Mr. Brian L. Roberts. We believe that Mr. Roberts’ extensive experience and leadership in the cable, phone, wireless, Internet and programming industries, including as our former President, render him qualified to serve as one of our directors.

 

S. Decker Anstrom, 59, has served as a director since June 2001. From January 2002 to December 2008, Mr. Anstrom served as a director and President and Chief Operating Officer of Landmark Communications, Inc., a privately held multimedia company, the assets of which, prior to September 2008, included The

Weather Channel. From August 1999 to December 2001, Mr. Anstrom served as President and Chief Executive Officer of The Weather Channel. Mr. Anstrom was the President and Chief Executive Officer of NCTA from 1994 to 1999. We believe that Mr. Anstrom’s vast experience in the programming industry, including his various experiences as a president and chief executive officer as noted above, coupled with his experience in the cable, phone and Internet industries and in governmental affairs, render him qualified to serve as one of our directors.

 

Kenneth J. Bacon, 55, has served as a director since November 2002. Mr. Bacon has served as the Executive Vice President of Housing and Community Development at Fannie Mae since July 2005 and as Senior Vice President of Multifamily Investment at Fannie Mae since 2000. From January 2005 to July 2005, he served as the interim Executive Vice President of Housing and Community Development. Mr. Bacon is a member of the Executive Leadership Council and a director of the Corporation for Supportive Housing. We believe that Mr. Bacon’s significant experience in governmental affairs, the financial industry and the non-profit, educational and philanthropic communities renders him qualified to serve as one of our directors.

 

Sheldon M. Bonovitz, 72, has served as a director since March 1979. Mr. Bonovitz is currently Chairman Emeritus of Duane Morris LLP, a law firm. From January 1998 to December 2007, he served as Chairman and Chief Executive Officer of Duane Morris. Mr. Bonovitz is a director of eResearchTechnology, Inc. He is also Chairman of Philadelphia’s Children First Fund, a trustee of the Dolfinger-McMahon Charitable Trust and the Christian R. and Mary F. Lindbach Foundation and a member of the board of trustees of The Barnes Foundation, The Curtis Institute of Music, the Free Library of Philadelphia Foundation and the Philadelphia Museum of Art. He is a founder of the Foundation for Self-Taught American Artists, is the Foundation’s President and serves on the Foundation’s Board of Trustees. We believe that Mr. Bonovitz’s experience and leadership in the legal industry, including his experience as a chief executive officer as noted above, and experience in tax matters render him qualified to serve as one of our directors.

 

Edward D. Breen, 54, has served as a director since June 2005 and has been our Presiding Director since May 2008. Since July 2002, Mr. Breen has served as Chairman and Chief Executive Officer of Tyco International Ltd. (“Tyco International”). From January 2002 to July 2002, Mr. Breen served as President and Chief Operating Officer of Motorola, Inc.; from January 2001 to January 2002, he served as Executive Vice President and President of Motorola’s Networks Sector; and from January 2000 to January 2001, he served as Executive Vice President and President of Motorola’s Broadband Communications Sector. Mr. Breen is also a director of Tyco International. Within the past five years, Mr. Breen was a director of McLeodUSA Incorporated until May 2005. We believe that Mr. Breen’s extensive experience in the technology, equipment supplier and consumer product sectors, notably as those sectors relate to the cable and phone industries, including his various experiences as a president and chief executive officer as noted above, renders him qualified to serve as one of our directors.

 

Julian A. Brodsky, 76, has served as a director since March 1969 and has been an employee of Comcast since 1964. Since May 2004, he has served as our non-executive Vice Chairman. From May 1987 to May 2004, he served as our Vice Chairman. In addition, he is a director of Amdocs Ltd., RBB Fund, Inc. and the Philadelphia Chamber Music Society, a trustee and Vice Chairman of the Philadelphia Museum of Art and a director emeritus of The Cable Center. Within the past five years, Mr. Brodsky was a director of Grey Global Group Inc. until March 2005. We believe that Mr. Brodsky’s vast experience in the cable, phone, wireless, Internet, programming and financial industries, coupled with an accounting background, render him qualified to serve as one of our directors.

 

Joseph J. Collins, 65, has served as a director since October 2004. Mr. Collins currently serves as the Chairman of Aegis, LLC. From August 2001 to December 2003, he served as Chairman and Chief Executive Officer of AOL Time Warner Interactive Video. From 1989 to August 2001, Mr. Collins served as Chairman and Chief Executive Officer of Time Warner Cable. We believe that Mr. Collins’ extensive experience and leadership in the cable and Internet industries, including his various experiences as a chief executive officer as noted above, coupled with his experience in the programming and technology industries and in governmental affairs, render him qualified to serve as one of our directors.

J. Michael Cook, 67, has served as a director since November 2002. Mr. Cook is a director of International Flavors & Fragrances, Inc. and is a Trustee of the Scripps Research Institute. Mr. Cook is also Chairman Emeritus of the board of Catalyst, Chairman of the Accountability Advisory Panel to the Comptroller General of the United States, an emeritus member of the Advisory Council of the Public Company Accounting Oversight Board (PCAOB) and a member of the Accounting Hall of Fame. Mr. Cook was also named one of the Outstanding Directors in America by Director’s Alert in 2002 and is a past member of the National Association of Corporate Directors’ Blue Ribbon Commission on Corporate Governance. Within the past five years, Mr. Cook was a director of Eli Lilly and Company until April 2009 and The Dow Chemical Company until May 2006. We believe that Mr. Cook’s extensive experience and leadership in the accounting industry, including his experience as the former Chairman and Chief Executive Officer of Deloitte & Touche LLP, coupled with his skills in corporate governance matters, render him qualified to serve as one of our directors.

 

Gerald L. Hassell, 58, has served as a director since May 2008. He is President of The Bank of New York Mellon (“BNYM”). Prior to the merger of The Bank of New York Company, Inc. and Mellon Financial Corporation in July 2007, Mr. Hassell was President of The Bank of New York Company, Inc. and The Bank of New York. Mr. Hassell is on BNYM’s Board of Directors. He is also Chairman of the Board of Visitors of The Fuqua School of Business at Duke University, a member of the Board of Visitors of Columbia University Medical Center, a member of The Financial Services Roundtable and Financial Services Forum, Vice Chairman of Big Brothers/Big Sisters of New York, and a member of the boards of the New York Philharmonic, The Economic Club of New York and The National September 11 Memorial & Museum. We believe that Mr. Hassell’s significant experience and leadership in the financial industry, including with respect to consumer financial products and his experience as a president as noted above, render him qualified to serve as one of our directors.

 

Jeffrey A. Honickman, 53, has served as a director since December 2005. He has served since 1990 as the Chief Executive Officer of Pepsi-Cola & National Brand Beverages, Ltd., a bottling and distribution company, which includes among its affiliates Pepsi-Cola Bottling Company of New York, Inc. and Canada Dry bottling companies from New York to Virginia. He is also the Vice President and Secretary of Antonio Origlio Inc., a beverage distributor based in Philadelphia, Pennsylvania, which does business as Origlio Beverages. He currently serves on the board of directors of the American Beverage Association and the Pepsi-Cola Bottlers Association. Mr. Honickman is a member of the board of trustees of Germantown Academy. He also serves on the board of governors of St. Joseph’s University Academy of Food Marketing, the board of trustees of the National Museum of American Jewish History, and the Dean’s Advisory Council of the Drexel University College of Business and Administration. We believe that Mr. Honickman’s significant experience in the retail and consumer products industries, including his experience as a chief executive officer as noted above, renders him qualified to serve as one of our directors.

 

Dr. Judith Rodin, 65, has served as a director since November 2002. She is President of the Rockefeller Foundation. From 1994 to 2004, Dr. Rodin served as President of the University of Pennsylvania, as well as a professor of psychology and of medicine and psychiatry at the University of Pennsylvania. She also serves as a director of AMR Corporation and Citigroup Inc. Within the past five years, Dr. Rodin was a director of Aetna, Inc. until May 2005. We believe that Dr. Rodin’s extensive experience in the non-profit, educational and philanthropic communities, including her various experiences as a president as noted above, renders her qualified to serve as one of our directors.

 

Michael I. Sovern, 78, has served as a director since November 2002. Mr. Sovern is Chairman of Sotheby’s. He is also President Emeritus and Chancellor Kent Professor of Law at Columbia University where he served as President for 13 years. He is President and a director of The Shubert Foundation and a director of The Shubert Organization. He is also a director of Sotheby’s. Within the past five years, Mr. Sovern was a director of Sequa Corp. until December 2007. We believe that Mr. Sovern’s extensive experience in the legal industry and in the non-profit, educational and philanthropic communities, including his various experiences as a president as noted above, renders him qualified to serve as one of our directors.

About our Board and its Committees

 

 

 

Director Compensation

 

As has been the case for the last several years, in doing its work with respect to determining 2009 nonemployee director compensation, the Compensation Committee directs Mercer to provide analyses with respect to various nonemployee director compensation data. Mercer, however, does not recommend or determine compensation levels or elements. The 2009 nonemployee director compensation program approved by the Compensation Committee is described below.

 

Board and Committee Fees and Equity Awards

 

Directors who are our employees do not receive any fees for their services as directors, including for any service on any Board committee. Each nonemployee director receives a $60,000 annual retainer and $2,500 for each Board meeting or other meeting (except a Board committee meeting as described below) attended in his or her capacity as director or for any other business conducted on our behalf, $2,500 for each Audit, Compensation or Governance and Directors Nominating Committee meeting attended and $1,000 for each Finance Committee meeting attended. The Chair of the Audit Committee receives an additional annual retainer of $20,000, and the Chairs of the Compensation Committee and the Governance and Directors Nominating Committee receive an additional annual retainer of $10,000. Other members of the Audit Committee receive an additional annual retainer of $10,000 and other members of the Compensation Committee and the Governance and Directors Nominating Committee receive an additional annual retainer of $5,000. The Chair of the Finance Committee receives an additional annual retainer of $5,000 and the other members of this committee receive an additional annual retainer of $2,500. Fees received by a director may be deferred in whole or in part under our deferred compensation plans. Up to one-half of the Board annual retainer may be received, at the election of the nonemployee director, in shares of Class A common stock, the receipt of which may be deferred in whole or in part. If deferred, such shares accrue dividend equivalents during the deferral period.

 

Nonemployee directors are reimbursed for travel expenses for meetings attended. Nonemployee directors are provided with our video, high-speed Internet and phone services at no cost (if available in the area in which they live) during the time they serve on our Board and for five years thereafter.

 

Each nonemployee director is granted annually, on November 20, an award of share units with respect to shares of Class A common stock having a fair market value on the date of grant of $125,000, the receipt of which may be deferred in whole or in part under our restricted stock plan. If deferred, such shares accrue dividend equivalents during the deferral period. These share units are fully vested on the grant date. It is the practice of our Board to review nonemployee director compensation on a biennial basis.

 

For details regarding director compensation for 2009, see the “Director Compensation for 2009” table on page 58.

 

Director Stock Ownership Policy

 

Our nonemployee director stock ownership policy requires our nonemployee directors to hold a number of shares of our common stock having a value equal to five times the director’s annual cash retainer. Each nonemployee director has a period of five years to reach this ownership requirement. For purposes of this policy, “ownership” is defined to include stock owned directly or indirectly by the director and shares underlying deferred stock units under our deferred stock option plan. In addition, 60% of each of the following types of ownership also count: the market value of the director’s stock fund under our deferred compensation plans, deferred shares under our restricted stock plan and the difference between the market price and exercise price of vested stock options. In determining compliance, the Compensation Committee may take into account any noncompliance that occurs solely or primarily as a result of a decline in the market price of our stock. Our nonemployee director stock ownership policy is posted under the “Governance” section of our website at www.cmcsa.com or www.cmcsk.com. All nonemployee directors satisfy the requirements of our stock ownership policy.

 

Transactions between the Company and our Directors

 

For information regarding our related party transaction policy and details regarding certain related party transactions, please see “Related Party Transaction Policy and Certain Transactions” below.

 

The Audit Committee has appointed Deloitte & Touche LLP to serve as our independent auditors for the fiscal year ending December 31, 2010. We are asking you to ratify this appointment, although your ratification is not required. A representative of Deloitte & Touche LLP will be present at the meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions.

 

OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITORS.

 

Set forth below are the fees paid or accrued for the services of Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu and their respective affiliates in 2009 and 2008.

 

		2009				2008
		(in millions)
Audit fees		$	4.9			$	5.1
Audit-related fees		$	0.7			$	0.5
Tax fees		$	0.3			$	0.4
All other fees		$	0.9			$	0.1
		$	6.8			$	6.1

 

Audit fees consisted of fees paid or accrued for services rendered to us and our subsidiaries for the audits of our annual financial statements, audits of our internal control over financial reporting (as required by Section 404 of the Sarbanes-Oxley Act of 2002), reviews of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings.

 

Audit-related fees consisted primarily of fees paid or accrued for attestation services related to contractual and regulatory compliance and, in 2009, also included accounting consultation related to the NBCU Transaction (as defined below in “Executive Compensation — Compensation Discussion and Analysis — Overview of Our Compensation Program Philosophy and Process”).

 

Tax fees consisted of fees paid or accrued for domestic and foreign tax compliance services, including tax examination assistance and expatriate administration and tax preparation. There were no fees paid or accrued in 2009 and 2008 for tax planning.

 

Other fees consisted of fees paid or accrued for consulting services regarding the hierarchy of jobs and job titles in our human resources database and enterprise risk management consulting services.

 

Preapproval Policy of Audit Committee of Services Performed by Independent Auditors

 

The Audit Committee’s policy requires that the committee preapprove audit and non-audit services performed by the independent auditors to assure that the services do not impair the auditors’ independence. Unless a type of service has received general preapproval, it requires separate preapproval by the Audit Committee. Even if a service has received general preapproval, if the fee associated with the service exceeds $250,000 in a single engagement or series of related engagements or relates to tax planning, it requires separate preapproval. The Audit Committee has delegated its preapproval authority to its Chair.

Report of the Audit Committee

 

The Audit Committee is comprised solely of independent directors meeting the requirements of applicable SEC and NASDAQ Global Select Market rules. The key responsibilities of our committee are set forth in our charter, which was adopted by us and approved by the Board and is posted under the “Governance” section of Comcast’s website at www.cmcsa.com or www.cmcsk.com.

 

We serve in an oversight capacity and are not intended to be part of Comcast’s operational or managerial decision-making process. Comcast’s management is responsible for the preparation, integrity and fair presentation of information in the consolidated financial statements, the financial reporting process and internal control over financial reporting. The independent auditors are responsible for auditing the consolidated financial statements and internal control over financial reporting. Our principal purpose is to monitor these processes.

 

In this context, at each regularly scheduled meeting, we met and held discussions with management and the independent auditors. Management represented to us that Comcast’s consolidated financial statements were prepared in accordance with generally accepted accounting principles applied on a consistent basis. Prior to their issuance, we reviewed and discussed the quarterly and annual earnings press releases and consolidated financial statements (including the presentation of non-GAAP financial information) with management and the independent auditors. We also discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as amended, and Rule 2-07 (Communication with Audit Committees) of Regulation S-X.

 

We discussed with the independent auditors the auditors’ independence from Comcast and its management, including the matters, if any, in the written disclosures delivered pursuant to the applicable requirements of the Public Company Accounting Oversight Board. We pre-approved all services provided by the independent auditors and considered whether their provision of such services to Comcast is compatible with maintaining the auditors’ independence.

 

We discussed with Comcast’s internal and independent auditors the overall scope and plans for their respective audits. We met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, the evaluations of Comcast’s internal controls and the overall quality and integrity of Comcast’s financial reporting.

 

Based on the reviews and discussions referred to above, we recommended to the Board, and the Board approved, that the audited financial statements be included in Comcast’s Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC.

 

We have appointed Deloitte & Touche LLP as Comcast’s independent auditors for 2010.

 

Members of the Audit Committee

 

J. Michael Cook (Chair)

Joseph J. Collins

Jeffrey A. Honickman

Dr. Judith Rodin

 

Our 2006 Cash Bonus Plan, as amended and restated (the “Bonus Plan”), became effective on January 1, 2006 upon its adoption by our Compensation Committee and has been amended thereafter from time to time. The Bonus Plan was approved by our shareholders on May 18, 2006. The purpose of the Bonus Plan is to provide performance-based cash incentive compensation to certain of our management employees.

 

Section 162(m) of the Code requires that plans such as the Bonus Plan be approved by shareholders not less than once every five years in order to have amounts paid under such plans that are based on the achievement of quantitative performance goals or other objectively determinable goals treated as qualified performance-based compensation. Qualified performance-based compensation amounts payable under the Bonus Plan are deductible by us for federal income tax purposes. Accordingly, our Board is seeking shareholder approval of the Bonus Plan. If the Bonus Plan is not approved by our shareholders, we may continue to pay bonuses under the Bonus Plan that are based on qualitative performance goals. In addition, if the Bonus Plan is not approved by our shareholders, we will not pay any bonuses to our named executive officers under the Bonus Plan in respect of years after 2010 that are based on quantitative performance goals, but we may continue to pay bonuses to our named executive officers under other incentive arrangements or on a discretionary basis as we may determine are necessary to recruit and retain employees based on performance standards established by the Board or the Compensation Committee from time to time; the amount of such bonuses will not be deductible for federal tax purposes.

 

Description of our 2006 Cash Bonus Plan

 

The following is a summary of the material features of the Bonus Plan. The following summary does not purport to be complete and is qualified in its entirety by reference to the terms of the Bonus Plan, which is attached to this proxy statement as Appendix A.

 

Types of Awards; Eligibility.  The Bonus Plan provides for the payment of annual cash bonuses to management employees of the company and its affiliates. The number of employees, including our named executive officers, currently eligible to participate in the Bonus Plan is approximately 42,000.

 

Amount Subject to the Plan.  Target awards under the Bonus Plan are expressed as a percentage of an eligible employee’s base salary. The maximum amount payable to any employee under the Bonus Plan with respect to any calendar year cannot exceed $12 million.

 

Term of the Plan.  No awards will be made under the Bonus Plan with respect to any calendar year beginning after December 31, 2015. Awards granted after December 31, 2010 to our named executive officers that are based on the satisfaction of quantitative performance goals for which we seek a tax deduction for federal tax purposes will be conditioned on the prior re-approval of the Bonus Plan by our shareholders.

 

Administration.  The Bonus Plan is administered by the Compensation Committee, which has the authority to select employees to participate in the Bonus Plan, set applicable performance goals, determine whether the performance goals have been satisfied, interpret the Bonus Plan and provide rules and regulations relating to the Bonus Plan. The Compensation Committee may delegate to one of our officers or a committee of two or more of our officers its discretion under the Bonus Plan to grant awards to any eligible employee other than an individual who, at the time of grant, has a base salary of $500,000 or more, holds a position with us of Senior Vice President or higher, is one of our named executive officers or is subject to the short-swing profit recapture rules of the Securities Exchange Act of 1934, as amended. In addition, the Compensation Committee may delegate to a committee, comprised of the chairman of the Compensation Committee and one or more of our officers designated by the Compensation Committee, its discretion under the Bonus Plan to grant awards to eligible employees who, at the time of grant, have a base salary of $500,000 or more or hold a position with us of Senior Vice President or higher.

 

Terms of Awards; Performance Goals.  The Compensation Committee will determine the terms and conditions of each award under the Bonus Plan. No award will be payable to a participant under the Bonus Plan until the Compensation Committee certifies that the performance goals associated with the award have been satisfied. Awards are paid as soon as practicable following the end of each applicable calendar year.

The Compensation Committee may establish company-wide, division-wide or individual goals for each calendar year, which may be quantitative performance standards or qualitative performance standards. The quantitative performance standards may include, but are not limited to, financial measurements such as income, expense, operating cash flow, capital spending, numbers of customers of, or subscribers for, various services and products offered by us or one of our divisions, quantitative customer service measurements and other objective financial or service-based standards relevant to our businesses as may be established by the Compensation Committee. The qualitative performance standards may include, but are not limited to, customer service, management effectiveness, workforce diversity and other qualitative performance standards relevant to our businesses as may be established by the Compensation Committee.

 

For each calendar year, the quantitative performance goals for cash bonus awards to our named executive officers will be established by the Compensation Committee by not later than the 90th day of that year. The Compensation Committee will also determine whether the performance goals have been satisfied and the amount of awards paid under the Bonus Plan.

 

Withholding.  All award payments will be subject to withholding of applicable federal, state, local or other taxes.

 

Terminating Events.  In the event of a liquidation of our company or a transaction or series of transactions that results in a change in control of our company (as determined by our Board), the Compensation Committee will give at least 30 days notice to plan participants prior to the anticipated date of any such occurrence. The Compensation Committee may, in its discretion, provide in this notice that upon the completion of this event, any remaining conditions to the payment of an award under the Bonus Plan will be waived in whole or in part.

 

Amendment or Termination.  Our Board or our Compensation Committee may amend or terminate the Bonus Plan at any time. No award then granted under the Bonus Plan will be affected by any such amendment or termination without the written consent of the participant. Shareholder approval will be obtained for an amendment if it is determined to be required by applicable law, regulation or NASDAQ Global Select Market rules.

 

New Plan Benefits.  Future grants of awards, if any, that will be made to eligible employees are subject to the discretion of the Compensation Committee and, therefore, are not determinable at this time. The following table reflects the awards granted under the Bonus Plan in 2009.

 

2006 Cash Bonus Plan

 

Name and Position		2009 Awards ($)(1)
Brian L. Roberts Chairman of the Board, President and Chief Executive Officer		$	8,234,238
Michael J. Angelakis Executive Vice President and Chief Financial Officer			4,946,396
Stephen B. Burke Executive Vice President and Chief Operating Officer			6,595,196
David L. Cohen Executive Vice President			1,639,043
Arthur R. Block Senior Vice President, General Counsel and Secretary			799,696
All Executive Officers			22,932,092
Non-Executive Officer Director Group			—
Non-Executive Officer Employee Group			247,306,733

 

 

 

OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” APPROVAL OF OUR 2006 CASH BONUS PLAN.

 

We received the following three shareholder proposals. The proponent of each proposal has represented to us that the proponent has continuously held at least $2,000 in market value of Class A common stock for at least one year and will continue to hold these securities through the date of the annual meeting of shareholders. To be voted upon at our 2010 annual meeting of shareholders, the proponent of a proposal, or a representative of the proponent qualified under Pennsylvania law, must attend the meeting to present the proposal.

 

For each of the shareholder proposals, other than adding a brief title for the proposal, we have included the proposal and shareholder’s supporting statement exactly as we received it. Following each proposal, we explain why our Board recommends a vote AGAINST the proposal.

 

PROPOSAL 4:  TO PROVIDE FOR CUMULATIVE VOTING IN THE ELECTION OF DIRECTORS

 

The following proposal and supporting statement were submitted by Evelyn Y. Davis, 2600 Virginia Ave., N.W. Suite 215, Washington, DC 20037, who has advised us that she holds 500 shares of our Class A common stock.

 

RESOLVED: “That the stockholders of Comcast, assembled in Annual Meeting in person and by proxy, hereby request the Board of Directors to take the necessary steps to provide for cumulative voting in the election of directors, which means each stockholder shall be entitled to as many votes as shall equal the number of shares he or she owns multiplied by the number of directors to be elected, and he or she may cast all of such votes for a single candidate, or any two or more of them as he or she may see fit.”

 

REASONS: “Many states have mandatory cumulative voting, so do National Banks.”

 

“In addition, many corporations have adopted cumulative voting.”

 

“If you AGREE, please mark your proxy FOR this resolution.”

 

Company Response to Shareholder Proposal

 

We oppose this proposal because we do not believe cumulative voting is in the best interests of our company and our shareholders. The Governance and Directors Nominating Committee, which is responsible for identifying and recommending qualified individuals for director nomination, consists solely of independent nonmanagement directors. This ensures that the Board will continue to exercise independent judgment and remain accountable to all of our shareholders, rather than to a particular group. The current Board is committed to continuing its strong oversight of management and progressive corporate governance practices, which include such safeguards as an annually elected Board, a substantial majority of independent directors, a highly effective independent Presiding Director, key Board committees composed exclusively of independent directors and fully transparent corporate governance guidelines and committee charters.

 

Cumulative voting could impair the effective functioning of the Board by electing a director obligated to represent the interests of a group of shareholders rather than all of our shareholders. We are concerned that any director elected by a limited constituency may have difficulty fulfilling his or her fiduciary duty of loyalty to us and all of our shareholders. The Board believes that these potential conflicts might create factionalism and undermine the ability of Board members to work effectively for the best interests of all shareholders and not a selected few.

 

FOR THESE REASONS, OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “AGAINST” THIS PROPOSAL.

PROPOSAL 5:  TO ADOPT AND DISCLOSE A SUCCESSION PLANNING POLICY AND ISSUE ANNUAL REPORTS ON ITS SUCCESSION PLAN

 

The following proposal and supporting statement were submitted by the Central Laborers’ Pension Fund, P.O. Box 1267, Jacksonville, IL 62651, which has advised us that it holds 18,071 shares of our Class A common stock.

 

RESOLVED: That the shareholders of Comcast Corporation (“Company”) hereby request that the Board of Directors initiate the appropriate process to amend the Company’s Corporate Governance Guidelines (“Guidelines”) to adopt and disclose a written and detailed succession planning policy, including the following specific features:

 

 

Supporting Statement

 

CEO succession is one of the primary responsibilities of the board of directors. A recent study published by the NACD quoted a director of a large technology firm: “A board’s biggest responsibility is succession planning. It’s the one area where the board is completely accountable, and the choice has significant consequences, good and bad, for the corporation’s future.” (The Role of the Board in CEO Succession: A Best Practices Study, 2006). The study also cited research by Challenger, Gray & Christmas that “CEO departures doubled in 2005, with 1228 departures recorded from the beginning of 2005 through November, up 102 percent from the same period in 2004.”

 

In its 2007 study What Makes the Most Admired Companies Great: Board Governance and Effective Human Capital Management, Hay Group found that 85% of the Most Admired Company boards have a well defined CEO succession plan to prepare for replacement of the CEO on a long-term basis and that 91% have a well defined plan to cover the emergency loss of the CEO that is discussed at least annually by the board.

 

The NACD report identified several best practices and innovations in CEO succession planning. The report found that boards of companies with successful CEO transitions are more likely to have well-developed succession plans that are put in place well before a transition, are focused on developing internal candidates and include clear candidate criteria and a formal assessment process. Our proposal is intended to have the board adopt a written policy containing several specific best practices in order to ensure a smooth transition in the event of the CEO’s departure. We urge shareholders to vote FOR our proposal.

 

Company Response to Shareholder Proposal

 

We oppose this proposal because we believe it is unnecessary and not in the best interests of our shareholders. The Board, led by its independent directors, already actively engages in succession planning pursuant to a well-developed process. We believe that our current approach to succession planning is superior to the approach prescribed by the proposal, which could have an adverse impact on our company and our competitive position.

 

The Board believes that succession planning is one of its essential functions. Accordingly, two different committees of the Board, each composed exclusively of independent directors, focus on succession planning. As addressed in “About our Board and its Committees” beginning on page 11, the Compensation Committee and the Governance and Directors Nominating Committee jointly oversee our succession planning. Additionally, while the proposal addresses succession planning only for a Chief Executive Officer, the Board

and its committees currently engage in succession planning for our senior executive management, including — but not limited to — the Chief Executive Officer.

 

Our current succession planning process does include certain of the features contemplated by the proposal. We regularly review our process, including an annual review with our Board. We develop criteria for the Chief Executive Officer position which reflect our business strategy and use a formal assessment process to evaluate candidates. We identify and develop internal candidates. And we recognize the importance of maintaining and reviewing both a long-term transition plan and an emergency transition plan.

 

However, we believe that the requirement included in the proposal that the Board produce and disclose annually to our shareholders a detailed succession planning policy could adversely affect our shareholders. For an annual report to be meaningful, it would have to include detailed information that could harm our competitive position. We do not believe it would be in the best interests of our shareholders to provide detailed information to our competitors about our business strategy and outlook, our most promising internal candidates, any desirable external candidates and other factors that our directors currently consider in the succession planning process. Any such information that we elect or are required to disclose should be disclosed at the time we deem it advisable or required. If we omitted the competitively sensitive information that would be required by the report contemplated by the proposal, the report would consist only of general statements containing little substance.

 

The Board has been, and will continue to be, fully engaged in thoughtful and timely succession planning. We believe, however, that the amount of disclosure contemplated by this proposal would not be in the best interests of our shareholders.

 

FOR THESE REASONS, OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “AGAINST” THIS PROPOSAL.

 

PROPOSAL 6:  TO REQUIRE THAT THE CHAIRMAN OF THE BOARD NOT BE A CURRENT OR FORMER EXECUTIVE OFFICER

 

The following proposal and supporting statement were submitted by the AFL-CIO Reserve Fund, 815 Sixteenth Street, N.W., Washington, DC 20006, which has advised us that it holds 2,171 shares of our Class A common stock.

 

RESOLVED: That stockholders of Comcast Corporation (the “Company”), urge the Board of Directors (the “Board”) to take the steps necessary to amend the Company’s articles of incorporation to require that an independent director, who has not previously served as an executive officer of the Company, be its Chairman.

 

The policy should be implemented so as not to violate any contractual obligations. The policy should also specify the process for selecting a new independent chairman if the current chairman ceases to be independent between annual meetings of shareholders; or if no independent director is available and willing to serve as chairman.

 

Supporting Statement

 

We believe it is the responsibility of the Board to protect shareholders’ long-term interests by providing independent oversight of management, including the Chief Executive Officer (“CEO”), in directing the corporation’s business and affairs.

 

The Millstein Center for Corporate Governance and Performance at the Yale School of Management and the Chairmen’s Forum endorsed a policy in March 2009 calling on U.S. public companies to separate the roles of chairman of the board and CEO. An independent chairman “curbs conflicts of interest, promotes oversight of risk, manages the relationship between the board and the CEO, serves as a conduit for regular communication with shareowners, and is a logical next step in the development of an independent board,” the policy notes.

We believe that when the top executive serves as board chairman, this arrangement may hinder the board’s ability to monitor the CEO’s performance. Andrew Grove, former chairman and CEO of Intel Corporation, recognized this and relinquished the CEO’s position. “The separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the CEO an employee? If he’s an employee, he needs a boss, and that boss is the board. The chairman runs the board. How can the CEO be his own boss?” (Business Week, November 11, 2002.)

 

Comcast’s articles of incorporation personally name Brian Roberts as Chairman. We believe that this unique provision — combined with Comcast’s dual class stock that provides Brian Roberts a non-dilutable one-third vote despite owning less than one percent of all of Comcast’s outstanding voting shares — reduces management’s accountability to shareholders. In our opinion, the designation of a presiding director as required by the NASDAQ listing standards is simply not an adequate substitution for a truly independent board chair that has no other connection to the Company.

 

We believe an independent Chairman can enhance investor confidence in our Company and strengthen the integrity of the Board.

 

We urge you to vote FOR this resolution.

 

Company Response to Shareholder Proposal

 

Our Board believes that we and our shareholders are best served by having Brian L. Roberts serve as Chairman and Chief Executive Officer. Our Board also believes that Board independence and oversight of management are effectively maintained through the Board’s current composition, our Board committees’ structure and composition and our Presiding Director, who is an independent director appointed annually by the Board after being recommended by the Governance and Directors Nominating Committee. Furthermore, having one individual perform the role of Chairman and Chief Executive Officer is both consistent with the practice of many major companies and not restricted or prohibited by current laws (including the Sarbanes-Oxley Act of 2002 and recently promulgated SEC regulations).

 

Only three of the 13 members of our Board are currently our employees, and all of our Board committees, other than the Finance Committee, consist entirely of independent directors. Therefore, there are ample outside directors to offer critical review of management plans. Moreover, our Presiding Director, among other things and as more fully described above under “Proposal 1: Election of Directors — About our Board and its Committees — Presiding Director,” presides over executive sessions of our independent directors and reviews and suggests topics for discussion and presentation at our Board meetings. Furthermore, Mr. Roberts has his performance evaluated annually by our Compensation Committee in accordance with its charter, as well as by our independent directors in an executive session in accordance with our corporate governance guidelines.

 

Our directors, including the Chairman of the Board, are also bound by fiduciary obligations under law to act in a manner that they believe to be in our best interests and the best interests of our shareholders. Separating the offices of Chairman of the Board and Chief Executive Officer would not serve to augment or diminish this fiduciary duty.

 

Rather, our Board believes that Mr. Roberts, in his capacities as Chairman and Chief Executive Officer, serves as a bridge between the Board and management and provides critical leadership for carrying out our strategic initiatives and confronting our challenges.

In addition, the Board believes that it should not be constrained by an inflexible, formal requirement that the offices of Chairman of the Board and Chief Executive Officer be separated, even if such a requirement applied only to successors of Mr. Roberts. We and our shareholders are best served by maintaining the flexibility to have the same individual serve as Chairman and Chief Executive Officer, based on what is in the best interests of our company at a given point in time.

 

Our Board believes that the adoption of a policy requiring the election of a non-management Chairman of the Board would not enhance its independence or performance, and is not in the best interests of our shareholders.

 

FOR THESE REASONS, OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “AGAINST” THIS PROPOSAL.

 

This discussion and analysis describes our executive compensation philosophy, process, plans and practices, and gives the context for understanding and evaluating the more specific compensation information contained in the tables and related disclosures that follow.

 

Overview of Our Compensation Program Philosophy and Process

 

We are a leading provider of video, high-speed Internet and phone services, offering a variety of entertainment, information and communications services to residential and commercial customers. As of December 31, 2009, we served approximately 23.6 million video customers, 15.9 million high-speed Internet customers and 7.6 million phone customers, and passed over 51.2 million homes in 39 states and the District of Columbia.

 

We operate our businesses in an intensely competitive, extensively regulated and rapidly changing and complex technological environment. Our strategy of differentiating our products and services requires us to continuously improve the quality and value of our offerings by consistently introducing new and advanced features, products and services. Our customer base and market capitalization, as well as our annual capital expenditure and total debt levels, rank us among the largest companies in our industries and in the country. We sell our services primarily to consumers, exposing our revenues to the risks of the decline in consumer spending and demand in the current economy. Our expected formation of a joint venture (the “NBCU Joint Venture”) with General Electric Company, in which the businesses of NBC Universal and certain of our program networks and other assets will be contributed to a new subsidiary that we will control and manage (the “NBCU Transaction”), will materially expand the number, size and complexity of the businesses we operate when closed.

 

Our ability to attract and retain the highest caliber executive talent in the marketplace is a key to continuing our long-term track record of strong financial performance, particularly in light of the extraordinary challenges and growth opportunities described in the prior paragraph. We have been recognized within our industries as having one of the best and most stable senior management teams of any company over the years. Our compensation practices are a major factor in our success in attracting and retaining the talent necessary to achieve our goals.

 

Consistent with this view of our position in the business landscape, the great importance we place on the quality and consistency of our senior management in achieving results that build long-term shareholder value and the significance we attach to using compensation as a tool in talent management, we seek to offer those types and amounts of compensation that will serve to attract, motivate and retain the most highly qualified executive officers and key employees and provide these employees with the opportunity to build a meaningful ownership stake in our company.

 

The Compensation Committee is responsible for approving the nature and amount of compensation paid to, and the employment and related agreements entered into with, our executive officers, and, for all of our employees, overseeing our cash bonus and equity-based plans, approving guidelines for grants of awards under these plans and determining and overseeing our compensation and benefits policies generally.

 

Each year the Compensation Committee reviews the nature and amounts of all elements of the named executive officers’ compensation, both separately and in the aggregate, using comprehensive tally sheets that include the current value of outstanding stock option and RSU awards (as compared to their grant date value) and deferred compensation account balances. The Compensation Committee also reviews compensation data from peer groups and surveys and takes into account our prior year performance (including as compared to the prior year performance of our peer groups). The Compensation Committee as well reviews each element of each named executive officer’s compensation for internal consistency. As described below under this caption, in 2009, the Compensation Committee considered an expanded set of analyses in reviewing its overall philosophy and making specific compensation determinations.

In determining individual compensation, the Compensation Committee assesses each named executive officer’s responsibilities and roles with respect to overall corporate policy-making, management, operations and administration, and the importance of retaining the named executive officer. The Compensation Committee also evaluates the named executive officer’s prior year performance, both in terms of his contribution to our performance and as compared to his individual performance goals (as to the latter item, each year the Compensation Committee agrees on specific factors to be used in evaluating Mr. Brian L. Roberts, our Chairman and Chief Executive Officer).

 

The Compensation Committee’s objectives in this process are to ensure that both total compensation and its individual components are strongly competitive with respect to the companies in our peer groups, there is a significant portion of total compensation that is performance based, there is an appropriate balance in performance-based compensation between short-term cash-based and long-term equity-based components, the compensation program aligns the interests of our executives with our shareholders and the program does not contain incentives to take inappropriate business risks.

 

Following these reviews and assessments, and with these goals in mind, the Compensation Committee determines what it believes to be an appropriate current year compensation package for each named executive officer. This process is subjective and involves the exercise of discretion and judgment. While the Compensation Committee considers the various quantitative data described in this discussion and analysis, it does not use a mathematical or other formula in which stated factors or their interrelationship are quantified and weighted (either in general or as to each named executive officer). As discussed below under “— Elements and Mix of Our Compensation Program,” in addition to setting 2009 compensation at the start of the year, in December 2009, the Compensation Committee provided additional compensation to Messrs. Michael J. Angelakis (our Executive Vice President and Chief Financial Officer), Stephen B. Burke (our Executive Vice President and Chief Operating Officer) and Arthur R. Block (our Senior Vice President, General Counsel and Secretary), as consideration for their entering into new employment agreements.

 

As has been the case for the last several years, in doing its work with respect to determining 2009 compensation, the Compensation Committee directed Mercer, the Company’s compensation consultant, with respect to the various compensation analyses it performed. Mercer, however, does not recommend or determine compensation levels or elements, performance targets or compensation plan design. Each year, the Compensation Committee reviews our various engagements of Mercer and its affiliates (and the related fees) to assure it of Mercer’s objectivity with respect to its work for the Compensation Committee. The Compensation Committee’s review addresses both: (i) the basis for selecting Mercer or any of its affiliates for a particular engagement; and (ii) the mechanisms in place at Mercer to ensure objectivity in performing its executive compensation consulting services. See “Proposal 1: Election of Directors — About our Board and its Committees — Committees of our Board — Compensation Committee” for information on Mercer’s services and fees in 2009.

 

In November 2008, the Compensation Committee directly engaged ICCA as an additional consultant to assist with respect to the Compensation Committee’s 2009 compensation deliberations. The Compensation Committee asked ICCA to review and comment on, and make any recommendations for changes to: (i) the peer groups used for benchmarking compensation and performance data; and (ii) the compensation program for the named executive officers, including by analyzing the congruence of the components of the program with the Compensation Committee’s philosophy and by suggesting additional analyses for Mercer to conduct. As a result of ICCA’s work, the Compensation Committee requested that Mercer perform a variety of supplemental analyses, which are included in those described in the following paragraph. These analyses, together with ICCA’s comments and recommendations, were taken into account by the Compensation Committee in making its determinations with respect to the appropriate peer groups as well as the compensation program for the named executive officers for 2009. The Compensation Committee has decided that it will consider retaining an additional consultant from time to time as a means of periodically reviewing Mercer’s work to ensure that the Compensation Committee remains current in its understanding and evaluation of developments and trends in executive compensation. The Compensation Committee did not retain ICCA (or any other additional advisor) for 2010.

Mercer provided the following analyses for 2009: a peer group assessment, including a performance sensitivity analysis (correlating our stock price movement to that of our peer group companies); a proxy pay analysis (comparing named executive officer compensation to proxy statement data for executives holding comparable positions in our peer group companies); a compensation survey analysis (analyzing named executive officer compensation against that of executives holding comparable positions in broad groups of companies in non-customized published surveys); a pay mix analysis (analyzing components of pay compared to other components (e.g., fixed vs. variable, cash vs. equity-based), and how this mix has changed over time); an analysis of share dilution resulting from, and annual usage rates in, our equity-based compensation plans; an internal equity valuation (analyzing how closely paid our other named executive officers are to the Chief Executive Officer); a compensation sharing analysis (analyzing the portion of our cash flow that is used for named executive officer compensation); a historical performance analysis (comparing our performance relative to our peer group companies with respect to growth in operating cash flow, free cash flow, earnings per share and revenues); and a correlation to shareholder value analysis (evaluating the relationship of operating cash flow growth, free cash flow growth, earnings per share growth and revenue growth to total shareholder returns, as compared to our peer group companies).

 

Our Named Executive Officers for 2009

 

Our named executive officers for 2009 are Mr. Roberts, Mr. Angelakis, Mr. Burke, Mr. David L. Cohen (our Executive Vice President), and Mr. Block. Mr. Burke was also President of our Cable Division in 2009. In March 2010, Mr. Burke relinquished his day-to-day responsibilities in his role as President of our Cable Division to dedicate full time to his role as our Chief Operating Officer, in recognition of his leading the transition planning and post-closing integration efforts relating to the NBCU Transaction, and having supervisory responsibility for operations of both the Cable Division and the NBCU Joint Venture.

 

Use of Compensation and Performance Data

 

As described above under “— Overview of Our Compensation Program Philosophy and Process,” the Compensation Committee uses data disclosed in SEC filings and contained in published surveys to inform its judgment, by comparing: (i) our compensation levels to those of named executive officers of our competitors for executive talent, customers and capital; and (ii) our financial performance to that of the same competitors.

 

We believe that these competitors are comprised of companies in, as well as outside, the cable and communications industries, resulting in a broader range of companies than those with which we are often compared by analysts and others for stock performance purposes (in which the focus is only on competition for capital). For example, the companies with which the Compensation Committee compares named executive officer compensation levels is a broader group than the companies included in the peer group index in the stock performance graph contained in our Annual Report on Form 10-K.

 

In 2009, the Compensation Committee conducted a thorough review of its prior peer group determinations and considered various potential adjustments. While the Compensation Committee found it difficult (as in prior years) to find a single peer group (having a meaningful number of companies) that reflects our prominence in our industries and the size, scope, complexity and variety of our businesses, this effort confirmed the Compensation Committee’s prior conclusion that three separate groups of companies each represented one or more meaningful aspects of our profile and that the use of three peer groups lends value to the Compensation Committee’s deliberations. In addition, the Compensation Committee believes that it would not be useful to consolidate the three peer groups into a single group because the practices and outcomes that are unique to each group would be lost. Finally, Mercer’s analysis demonstrated that over recent years the correlation of our share price movement with each of the three peer groups has increased substantially. Accordingly, as in the last several years, the following peer groups were used in 2009 as sources for comparative compensation and performance data: (i) companies in the entertainment/media industry (CBS Corporation, News Corporation, Time Warner Inc., Viacom Inc. and The Walt Disney Company); (ii) companies in the communications industry (AT&T Inc., DIRECTV Group, Inc., Qwest Communications International Inc., Sprint Nextel Corporation, Time Warner Inc. and Verizon Communications Inc.); and (iii) “general industry” companies having comparable revenues and total market capitalization (3M Company,

Abbott Laboratories, American Express Company, Apple Inc., Bristol-Myers Squibb Company, Capital One Financial Corporation, Cisco Systems, Inc., The Coca-Cola Company, Deere & Company, The Dow Chemical Company, E.I. du Pont de Nemours and Company, Eli Lilly & Company, Exelon Corporation, Google Inc., Honeywell International Inc., Intel Corporation, Kraft Foods Inc., Lockheed Martin Corporation, McDonald’s Corporation, Merck & Co. Inc., MetLife, Inc., News Corporation, Occidental Petroleum Corporation, Oracle Corporation, Pepsico, Inc., Pfizer Inc., Prudential Financial, Inc., Time Warner Inc., U.S. Bancorp, United Parcel Service, Inc., United Technologies Corporation, The Walt Disney Company, Washington Mutual Inc. and Wyeth Pharmaceuticals). Each year Mercer reviews the composition of the peer groups based upon merger activity and other changes in size or lines of business.

 

Among the three peer groups, the Compensation Committee pays particular attention to the entertainment/media peer group because of its special relevance with respect to competition for executive talent. The business expertise of employees in that industry is highly correlated to our needs: our principal business is content distribution (meaning we are one of the world’s largest buyers and licensees of content). We also own and manage several program and sports networks, one of the largest broadband Internet portals and several entertainment-based Internet sites (meaning that we are a substantial seller and licensor of content as well). It is also increasingly the case that traditional content providers in the entertainment/media industry are looking for new ways to distribute content, both directly to consumers through the Internet and indirectly through alliances with wireless companies and video distributors. Following the closing of the NBCU Transaction, we will be a much more significant direct participant in the entertainment/media industry as a major content producer and licensor. For all of these reasons, our executives are attractive candidates to entertainment/media companies, in addition to such companies’ executives being attractive to us.

 

Comparisons for Mr. Roberts were made to peer chief executive officers. Comparisons for Mr. Angelakis were made to peer chief financial officers and by ordinal rank (i.e., the position in the Summary Compensation Table on page 40). Comparisons for Mr. Burke were made to peer chief operating officers and by ordinal rank. Comparisons for Mr. Cohen were made by ordinal rank and, where available, to peer chief administrative officers. Comparisons for Mr. Block were made to peer general counsels and by ordinal rank.

 

As a result of its strong belief in the importance of using compensation as a tool to attract and retain the best senior executives, in reviewing peer group data the Compensation Committee targets compensation to be competitive with the entertainment/media peer group and at the 75^th percentile for the communications and general industry peer groups. In the Compensation Committee’s view, it is appropriate for a company that has as its goal a high level of performance relative to its peers to set high reference points for its executive compensation targets. The compensation we deliver varies among the groups, and the individual companies within a group, in its relationship to the reference points. Our named executive officers’ total compensation for 2009 met or exceeded the reference points in most cases.

 

As a secondary means to inform its judgment, the Compensation Committee reviewed a Mercer compensation survey analysis in which base salary, total cash compensation (base salary plus target annual cash bonus) and total direct compensation (total cash compensation plus equity-based compensation) for each named executive officer were measured against published compensation survey data for functionally comparable positions among broad groups of companies of similar size to us. The Compensation Committee did not use this Mercer analysis, or any of the surveys included in this Mercer analysis, to benchmark our named executive officer compensation, but instead it used the analysis to understand the current compensation practices for comparable job functions of a broad view of companies across varied industry lines but with revenue sizes that are within a range close to ours. This analysis indicated that our named executive officers’ total compensation was relatively high, consistent with the Compensation Committee’s philosophy as stated above of correlating its goals of achieving high Company performance and attracting and retaining the highest quality executives with its executive compensation outcomes.

 

In determining total compensation levels for the named executive officers, the Compensation Committee also considered our prior year performance. Despite the weakening economy and intensifying competition, in 2008 we delivered healthy growth in revenue and operating cash flow, added meaningful numbers of customers, generated substantial free cash flow and returned significant capital to shareholders through stock

repurchases and the institution of a quarterly cash dividend. In addition, the Compensation Committee noted that we achieved these results while continuing the successful management of our balance sheet, allowing us liquidity and access to capital when needed during the year and avoiding any near or medium-term risk associated with debt repayment requirements.

 

With respect to comparative financial performance, Mercer conducted an analysis of our performance relative to our peer groups using various financial metrics as well as total shareholder return, in each case over one year and longer periods of time. In general, the Compensation Committee’s expectation is that our performance as compared to our peers over time should be consistent with its strongly competitive compensation philosophy. Over the past several years, our operating cash flow growth (the predominant measure that drives the annual cash bonuses described below under “— Elements and Mix of Our Compensation Program — Cash Bonus Incentive Compensation”) has generally fallen in the upper third of our peers, as has our revenue growth. Comparisons could not be readily made for free cash flow growth (due to varying investment decisions from year to year and by company) or earnings per share growth (due to many years of negative earnings by various companies). The analysis also indicated that while we allocate a relatively high portion of operating cash flow and free cash flow to pay named executive officers’ annual incentives and total compensation, it is directionally aligned with our performance relative to our peers.

 

The results of the peer group, compensation survey and performance analyses, as well as the other analyses referred to above, are considered important by the Compensation Committee. However, the Compensation Committee does not make any determination of, or change to, compensation in reaction to market data alone, but rather uses this information as one of several considerations to inform its judgment and put its experience in context in determining compensation levels (and when to change compensation levels).

 

Elements and Mix of Our Compensation Program

 

Our executive compensation program for our named executive officers includes the following key components: cash base salary; annual (short-term) cash bonus (which is performance based because earning the bonus is contingent upon the achievement of performance goals); and long-term equity-based compensation in the form of stock options (which are performance based because stock options provide no value without future stock price appreciation) and RSUs (which are performance based both because the ultimate value of any shares acquired upon vesting depends on our stock price and because vesting of RSUs is dependent upon achievement of one or more performance goals). In addition, named executive officers are eligible to participate in our deferred compensation plan, as well as in employee benefit plans that are generally available to all employees. These elements are the same as, or similar to, those used by most of our peer group companies and many other public companies. Within this general marketplace-defined environment, we have our own perspective on the relative importance and value of each element.

 

We view the executive compensation program on a “portfolio” basis. The various elements work together to achieve our objectives. This chart illustrates our view of the portfolio:

 

 

Each element of our compensation program is described in more detail as follows:

 

Base Salary.  This element of compensation is necessary to attract and retain any employee in any organization. As the basic fixed element of the compensation package, it serves as a baseline measure of an

employee’s value. Base salary is annually guaranteed compensation received by a named executive officer in exchange for investing his career with us.

 

Each of our named executive officers had an employment agreement in effect during 2009. Mr. Roberts’ most recent employment agreement was entered into in June 2005 and expires on June 30, 2010. Messrs. Angelakis’, Burke’s and Block’s most recent employment agreements were entered into in December 2009 and expire on December 31, 2012, 2014 and 2014, respectively. Mr. Cohen’s most recent employment agreement was entered into in November 2005 and expires on December 31, 2010. Each current employment agreement provides for an initial base salary and annual increases in base salary at the discretion of the Compensation Committee. Mr. Block’s prior employment agreement provided for a minimum annual base salary increase of 5% in 2009. The employment agreements do not permit base salary reductions, unless, in the case of Messrs. Roberts and Cohen, such reduction is pursuant to an overall plan to reduce the base salaries of all of our senior executive officers, and, in the case of Messrs. Angelakis, Burke and Block, in connection with a generally applicable salary reduction program.

 

In establishing the initial base salary level at the time the agreements were signed, the Compensation Committee considered job responsibilities, job performance, seniority and market data on base salary levels from peer group companies and compensation surveys. The Compensation Committee also reviewed base salary based on internal comparisons of executives relative to their responsibilities. Increases in base salary during the term of the agreement are generally based on individual performance, the levels of achievement of our performance goals during the tenure of the executive and any increase in duties and responsibilities placed on the executive as a result of our continuing growth. Mr. Block received a base salary increase in his December 2009 employment agreement to reflect his present and anticipated increased duties and responsibilities in connection with the NBCU Transaction and NBCU Joint Venture.

 

The named executive officers, other than Mr. Block, elected not to receive any base salary increase in 2009, and have elected to continue to not receive any base salary increase in 2010 (and through February 28, 2011), reflecting a willingness during this time period to forgo additional compensation on account of this element of non-performance based compensation.

 

Cash Bonus Incentive Compensation.  Our cash bonus plan, which was approved by our shareholders at the 2006 annual meeting and is being voted upon at this annual meeting, provides a variable element to annual cash compensation that in 2009 was tied directly to consolidated operating cash flow, free cash flow and revenue growth. This element is needed to complete a competitive total annual cash compensation package. However, it is at risk for performance — 100% of the target bonus is not paid unless there is 100% achievement of the goals and no bonus is paid unless a predetermined minimum in each performance goal is achieved. This plan puts a significant amount of annual cash compensation at risk and supports our objective that our named executive officers balance achieving satisfactory or better current year (short-term) results with long-term value creation.

 

The target bonus under our cash bonus plan in 2009 for each of the named executive officers was based on the Compensation Committee’s assessment of the optimal mix of base salary and annual cash bonus compensation. In addition, each named executive officer’s employment agreement provides for a minimum target bonus. In 2009, such target bonus, as a percentage of base salary, was as follows: Mr. Roberts, 300%; Mr. Angelakis, 300%; Mr. Burke, 300%; Mr. Cohen, 125%; and Mr. Block, 100%. For more detail on these bonuses, including the target amounts thereof, see the “Grants in 2009 of Plan-Based Awards” table on page 43. The differences in target bonus percentages are the result of the Compensation Committee’s determination of each named executive officer’s total compensation and its judgment as to how to optimally allocate that total among the various elements thereof.

 

For 2009, the Compensation Committee determined that annual cash bonus target achievement for the named executive officers would be based 60% on consolidated operating cash flow growth, 30% on consolidated free cash flow and 10% on consolidated revenue. For several years prior to 2008, the sole performance goal was consolidated operating cash flow growth. The Compensation Committee added consolidated free cash flow as a performance goal to provide an appropriate focus on additional items (such as capital expenditures and working capital) that can be affected by the decision making of our named executive

officers. The importance of operating cash flow and free cash flow as performance metrics is described below under “— Emphasis on Performance.” Based on ICCA’s work and Mercer’s analysis, in 2009 the Compensation Committee added consolidated revenue as a third performance goal, as an appropriately weighted focus on the overall growth of the business from all sources (e.g., sales of existing and new products and services and acquisitions of new customers). The correlation to shareholder value analysis indicated that operating cash flow is strongly correlated to total shareholder returns and revenue has a statistically significant correlation to total shareholder return. Free cash flow has a statistically significant correlation to total shareholder return for companies in the entertainment/media industry. Neither our Board nor the Compensation Committee has the discretion to award cash bonus compensation to our named executive officers under our plan absent attainment of the performance goals.

 

The Compensation Committee established the following goals for year-over-year increases in consolidated operating cash flow: if we achieved $13.1 billion or less (representing 99.8% or less of 2008 consolidated operating cash flow), the named executive officer would receive no bonus on account of this performance goal; if we achieved from greater than $13.1 billion to $13.7 billion (representing greater than 99.8% of 2008 consolidated operating cash flow to an increase of 4.3%), the named executive officer would receive 40% to 90% of the potential bonus (determined based on incremental increases in consolidated operating cash flow of approximately $100 million); if we achieved from greater than $13.7 billion to $13.791 billion (representing an increase of greater than 4.3% to 5%), the named executive officer would receive 100% of the potential bonus; and if we achieved greater than $13.791 billion (representing an increase of greater than 5%), the named executive officer would receive greater than 100% of the potential bonus up to a maximum of 150% (determined based on incremental increases in consolidated operating cash flow of approximately $100 million) if we achieved greater than $14.2 billion (representing a greater than 8.1% increase).

 

The Compensation Committee established the following goals for achievement of consolidated free cash flow: if we achieved $3.4 billion or less, the named executive officer would receive no bonus on account of this performance goal; if we achieved greater than $3.4 billion to $4.0 billion, the named executive officer would receive 40% to 90% of the potential bonus (determined based on incremental increases in consolidated free cash flow of $100 million); if we achieved greater than $4.0 billion to $4.1 billion, the named executive officer would receive 100% of the potential bonus; and if we achieved greater than $4.1 billion, the named executive officer would receive greater than 100% of the potential bonus up to a maximum of 150% at greater than $4.5 billion (determined based on incremental increases in consolidated free cash flow of $100 million).

 

The Compensation Committee established the following goals for achievement of consolidated revenue: if we achieved $35.0 billion or less, the named executive officer would receive no bonus on account of this performance goal; if we achieved greater than $35.0 billion to $36.2 billion, the named executive officer would receive 40% to 90% of the potential bonus (determined based on incremental increases in consolidated revenue of $200 million); if we achieved $36.2 billion to $36.5 billion, the named executive officer would receive 100% of the potential bonus; and if we achieved greater than $36.5 billion, the named executive officer would receive greater than 100% of the potential bonus up to a maximum of 150% at greater than $37.3 billion (determined based on incremental increases in consolidated revenue of $200 million). In each case, the bonus percentage achieved is the percentage of target applicable to the range within which the actual achievement fell.

 

Based on 2009 achievement of 100% of the potential bonus for operating cash flow growth (approximately $13.7 billion), 140% of the potential bonus for free cash flow (approximately $4.4 billion) and 70% of the potential bonus for revenue (approximately $35.8 billion), the named executive officers were entitled to receive 109% of their respective target amounts. This percentage was calculated as follows: (60% x 100%) + (30% x 140%) + (10% x 70%) = 109%. However, putting this achievement level in the context of lower levels of annual cash bonus achievement in 2009 by operating management (whose cash bonuses are based in large part on business unit operating metrics rather than consolidated financial performance), prior to their bonuses being determined, the named executive officers advised the Compensation Committee of their recommendation that they not receive a portion of their bonuses, and, as such, they were only granted 98% of their target amounts.

In connection with entering into his new employment agreement in December 2009, Messrs. Angelakis and Burke each also received cash “signing” bonuses (as described under “Agreements with Our Named Executive Officers — Employment Agreement with Mr. Angelakis, and — Employment Agreement with Mr. Burke”). These cash bonuses were in partial consideration (together with the additional RSU awards and the additional deferred compensation plan contribution amount described below under “— Equity-Based Incentive Compensation” and “ — Deferred Compensation”) for Messrs. Angelakis and Burke entering into the employment agreement that extended his prior employment agreement’s termination date to December 31, 2012 and December 31, 2014, respectively. The Compensation Committee sought these new agreements due to the importance of assuring that these named executive officers remain under contract for a longer period of time, given their present and anticipated increased responsibilities in connection with the NBCU Transaction and NBCU Joint Venture in the coming years.

 

Equity-Based Incentive Compensation.  Our equity-based long-term incentive compensation program is the compensation link between the named executive officers’ decision making and the long-term outcomes of those decisions. As described below under “— Emphasis on Long-Term Stock Ownership — Vesting of Equity-Based Incentive Compensation,” our vesting schedules require a relatively long holding period before a meaningful portion of the equity-based compensation can be realized, allowing time to see the results of the decisions, and the market time to react to the results, as well as providing a greater potential retention value.

 

The Compensation Committee believes that a strong reliance on long-term equity-based compensation is advantageous because this type of compensation fosters a long-term commitment by executive employees and motivates them to improve the long-term market performance of our stock. In our annual award program in March 2009, the Compensation Committee employed a diversified approach to this component in that we granted both stock options and RSUs, whereby each type of award represented approximately 50% of the total equity award by grant date value, as determined on a Black-Scholes basis in the case of stock options and using the closing price of a share of our Class A common stock in the case of RSUs.

 

RSUs in combination with stock options promote our goal of retention, as well as provide a direct and predictable alignment to share price. Because each RSU is equal in value to a share of our Class A common stock, the units have value, subject to the satisfaction of vesting requirements, when the stock price is flat or even declining. On the other hand, stock options only have value when the stock price increases. This combination of equity-based awards is appropriate in the view of the Compensation Committee because: (i) it provides some level of incentive even during periods of general market or industry decline, when good or better performance may not be reflected in our stock price; and (ii) it supports our culture of entrepreneurship and its focus on shareholder value creation while providing a strong retention vehicle.

 

The substantial drop in the market price of our common stock in 2007 significantly reduced the value of outstanding equity-based awards of the named executive officers, especially stock options, reflecting the relationship between compensation and shareholder value that is provided by these long-term equity-based compensation elements. The Compensation Committee has not taken into account the very substantially reduced “in the money” value of vested and unvested stock options (nor the substantially reduced value of unvested RSUs) in making its compensation decisions since 2007.

 

Our equity-based awards granted to our named executive officers in March 2009 were part of our annual award program, in which all eligible employees receive grants. In general, we also make stock option and RSU awards to eligible employees in connection with significant employment events such as hiring, promotion and entering into an employment agreement. Consistent with this approach, and as partial consideration for entering into the new employment agreements described above under “— Cash Bonus Incentive Compensation,” Messrs. Angelakis, Burke and Block received additional awards of RSUs, and Mr. Block received an additional award of stock options, in each case as described under “Agreements with Our Named Executive Officers — Employment Agreement with Mr. Angelakis, — Employment Agreement with Mr. Burke, and — Employment Agreement with Mr. Block.”

 

Primarily to conform to Internal Revenue Service (“IRS”) requirements relating to the deductibility of compensation, beginning in 2005, the Compensation Committee added a performance condition to RSUs granted to our named executive officers. Shares under RSUs granted in 2005 through 2007 vest in their first

scheduled year of vesting only if the performance goals have been achieved with respect to the prior year. Shares under RSUs granted in 2008 and subsequent years vest in their first scheduled year of vesting if the performance goals have been achieved with respect to any prior year. In all of the RSU grants, any shares which did not vest in their first scheduled year of vesting because of the failure of the required prior achievement of performance goals are “carried over” to the next year’s scheduled vesting date (if any such date remains under the grant) for potential vesting at that time. If vesting does not occur on the final potential vesting date, any unvested shares are forfeited.

 

For RSUs granted in 2005 through 2008, the Compensation Committee established the following performance goals: if we achieved a 5% to 6.9% year-over-year increase in operating cash flow, the named executive officer would receive 66% of the service vested portion of the award; and if we achieved a 7% or greater increase, the named executive officer would receive 100% of the service vested portion of the award. The operating cash flow growth goal necessary to achieve 100% vesting was achieved in each year from 2005 through 2008. However, the growth needed to achieve the 66% vesting level was not achieved in 2009. Accordingly, the named executive officers (other than Mr. Block, who was not a named executive officer prior to 2009 and, therefore, whose RSUs did not contain a performance condition prior to 2009) will not receive any shares that are otherwise scheduled to vest in 2010 with respect to RSUs granted in 2005 through 2007 (and shares scheduled to vest in 2010 under RSUs granted in 2005 are permanently lost). The value of the shares scheduled to vest in 2010 under the RSUs granted in 2005 through 2007 had vesting occurred (calculated using the closing price of the Class A common stock on December 31, 2009) would have been approximately $2.96 million for Mr. Roberts (of which approximately $1.67 million was permanently lost), approximately $240,000 for Mr. Angelakis, approximately $1.94 million for Mr. Burke (of which approximately $910,000 was permanently lost) and approximately $2.25 million for Mr. Cohen (of which approximately $1.65 million was permanently lost).

 

For RSUs granted under the annual program in March 2009, the Compensation Committee established the following performance goals: if we achieved a 5% to 6.9% year-over-year increase in free cash flow, the named executive officer would receive 66% of the service vested portion of the award; and if we achieve a 7% or greater increase, the named executive officer would receive 100% of the service vested portion of the award. The Compensation Committee established as a performance goal for the RSUs granted to Messrs. Angelakis, Burke and Block in December 2009 any year-over-year increase in free cash flow. The goal used in the December 2009 RSU grants was also used in RSUs granted to the named executive officers as part of our March 2010 annual award program. The Compensation Committee revised the performance goals in the 2009 and 2010 RSUs to reflect its intention that the goals meet IRS requirements for deductibility while at the same time appropriately reflecting reduced operating cash flow and free cash flow performance expectations compared to prior years in light of the competitive and economic environment. Neither our Board nor the Compensation Committee has the discretion to vest these RSUs absent attainment of the applicable goal.

 

In general, the total value of equity-based compensation is based on a proportional relationship to the expected cash compensation of each named executive officer, taking into account awards made at the same time to other executives, as well as the value of equity-based compensation awarded to comparable named executive officers at peer companies. The value of 2009 equity-based compensation (using grant date values), expressed as a percentage of 2009 base salary, taking account of awards made only in the March 2009 annual award program, was 375% for Mr. Roberts, 380% for Mr. Angelakis, 377% for Mr. Burke, 371% for Mr. Cohen and 158% for Mr. Block. The value of 2009 equity-based compensation, expressed as a percentage of the value of 2008 equity-based compensation, taking account of awards made only in the annual award programs, was 107% for Mr. Roberts, 108% for Mr. Angelakis, 108% for Mr. Burke, 109% for Mr. Cohen and 106% for Mr. Block (the grant date value of equity-based compensation in our annual award program has not materially increased over the last several years).

 

Deferred Compensation.  We maintain a deferred compensation plan that allows employees with a base salary of $200,000 or greater, including the named executive officers, to defer the receipt of cash compensation (i.e., base salary and annual bonus), as described below under “Nonqualified Deferred Compensation in and as of 2009 Fiscal Year-End.” In addition, the employment agreements of Messrs. Roberts, Angelakis, Burke and Cohen provide for specified amounts to be contributed to the named

executive officer’s deferred compensation plan account for each year of the agreement. Also, as partial consideration for entering into the employment agreements described above under “ — Cash Bonus Incentive Compensation,” Messrs. Angelakis and Burke received an additional deferred compensation plan contribution amount, in each case as described below under “Agreements with Our Named Executive Officers — Employment Agreement with Mr. Angelakis, and — Employment Agreement with Mr. Burke.” The contractually required contributions were agreed upon as a result of arm’s-length negotiations with the named executive officers and viewed by the Compensation Committee as a reasonable component part of overall compensation, especially from a retention perspective. The Compensation Committee reviewed each named executive officer’s plan balance at December 31, 2008 and annually reviews the embedded and projected costs of this plan.

 

Other than the deferred compensation plan (and a tax-qualified defined contribution (i.e., 401(k) plan), we do not offer any pension or other defined benefit-type plan to the named executive officers. In lieu of a defined benefit-type plan, which is found among several of our peer group companies, our deferred compensation plan provides a simple, transparent, tax-efficient vehicle for long-term value accumulation. The plan is one of our primary tools to attract and retain our named executive officers. In a similar manner to a traditional defined benefit executive retirement plan, the plan’s retention incentive gets stronger as the plan balance grows. In addition, the crediting rate is materially reduced following a termination of employment.

 

Also, our restricted stock plan permits recipients of awards to defer delivery of shares to a later date, without any guaranteed return on the vesting date value. In other words, any deferred shares, when later delivered, would have a value equal to the market value of our stock at that time. In addition, the plan permits recipients who have deferred delivery to elect to diversify any or all of the value of their deferred account into a cash equivalent account, which currently has an annual rate of return equivalent to that applicable under the deferred compensation plan. As of December 31, 2009, none of the named executive officers had elected to defer delivery of shares under any RSU awards.

 

Insurance Benefits.  In 2007 and 2008, we provided Mr. Roberts with premium reimbursements and tax payments under pre-existing contractual arrangements with respect to certain life insurance policies. These arrangements were put in place beginning in 1992. At that time, they were viewed by the Compensation Committee as an appropriate component of a comprehensive compensation program for Mr. Roberts. In February 2009, Mr. Roberts elected to relinquish his right to these benefits, effective January 1, 2009.

 

Perquisites.  Before 2006, we provided a limited amount of additional compensation through certain personal benefits to ease the demands on senior executives (including travel) and to provide security to our named executive officers and their families. Beginning in 2006, such benefits have been eliminated or our named executive officers have been required to pay us for any benefits that would otherwise be considered perquisites. In 2007 and 2008, as discussed above under “— Insurance Benefits,” we provided tax-related payments to Mr. Roberts in connection with certain life insurance benefits, which Mr. Roberts elected to relinquish effective January 1, 2009. Following his relinquishment, the Compensation Committee decided that as a matter of policy we should not provide tax gross-ups to our named executive officers for perquisites.

 

Payments in Connection with a Change in Control.  We generally do not have any benefits that are “triggered” automatically as a result of a “change in control” (a “single trigger”) or the occurrence of one or more specified events (a “double trigger”) that may follow a change in control, such as termination of employment without cause. Instead, our Board will determine whether it is appropriate to accelerate the vesting of stock options and/or RSUs, as applicable, or provide other benefits in connection with a change in control. There has been no determination of any guiding principles or factors that our Board may in the future use in determining the propriety of accelerating the vesting of stock options and/or RSUs, or providing other benefits, in connection with a change in control.

 

Mr. Roberts’ employment agreement provides that if his employment is terminated following a change in control, that termination will be treated as a termination without cause for the purpose of determining his benefits in those circumstances under his employment agreement. The Compensation Committee approved this provision as a fair and reasonable protection for our Chief Executive Officer in the event of a change in control.

Payments in Connection with a Termination of Employment.  Payments to our named executive officers upon a termination of employment are described below under “Potential Payments upon Termination or Change in Control.” These compensation arrangements are contained in each named executive officer’s employment or other agreements and are not a factor in the Compensation Committee’s determination of current year compensation elements. These arrangements were arrived at as a result of arm’s-length negotiations in connection with entering into each such agreement, based on the Compensation Committee’s decision that it was appropriate to provide more favorable arrangements than those offered to non-executive employees upon termination of employment. Prior to February 2009, Mr. Roberts’ spouse or his or her estate had the right, following Mr. Roberts’ death, to receive continued payment of base salary and annual cash bonus for up to five years. At that time, Mr. Roberts elected to relinquish this right.

 

Emphasis on Performance

 

The Compensation Committee’s emphasis on performance within the named executive officer compensation program is evidenced by the characteristics of several of its elements. Most obvious are the financial targets that are conditions to earning the annual cash bonus and the vesting of RSUs. In addition, the realized value of RSUs is directly tied to our stock price. Further, the entire value of stock options is based on appreciation in our stock price. This combination of internally measured (financial performance) and externally measured (stock price) performance provides both short-term and long-term performance components in the compensation structure of our named executive officers.

 

The Compensation Committee believes that the compensation program’s emphasis on performance, especially the equity-based compensation, aligns the compensation structure with the risks inherent in our businesses, in that the achievement (or lack of achievement) of our operating, investing and capital goals would be expected to be reflected in the market price of our stock. At the same time, the Compensation Committee reviews the nature and mix of compensation elements, as well as compensation plan design and award terms, to ensure that our compensation program aligns the interests of our executives with those of our shareholders, so as to avoid inadvertent incentives for the named executive officers to take inappropriate business risks by making decisions that may be in their best interests but not in the best interests of our shareholders. In conducting this review, the Compensation Committee takes into consideration specific business risks identified through our enterprise risk management process.

 

As described above under “— Elements and Mix of Our Compensation Program — Cash Bonus Incentive Compensation, and — Equity-Based Incentive Compensation,” in 2009 the Compensation Committee selected consolidated operating cash flow, free cash flow and revenue as the performance goals for the annual cash bonuses of our named executive officers, and consolidated free cash flow growth as the performance goal for vesting of their performance vested RSUs. The peer group analyses described above under “— Overview of Our Compensation Program Philosophy and Process” indicate that overall, both with respect to the mix of cash vs. equity-based and the types of equity-based vehicles used, our “pay at risk” practices are within the range of peer group practices. This is the case even after taking into account the additional fixed compensation resulting from contractually committed contributions to the deferred compensation plan for our named executive officers other than Mr. Block. (It should be noted that unlike the treatment given traditional defined benefit executive retirement plans of peer companies, deferred compensation contributions are considered as guaranteed payments in our comparisons.)

 

Total performance-based compensation in 2009 (using the grant date value of stock options and RSUs) was a significant percentage of the named executive officers’ total compensation (70% for Mr. Roberts, 67% for Mr. Angelakis, 62% for Mr. Burke, 69% for Mr. Cohen and 75% for Mr. Block).

 

Our consolidated operating cash flow, which is a non-GAAP financial measure, is defined as operating income before depreciation and amortization, excluding impairment charges related to fixed and intangible assets and gains or losses on sale of assets, if any. As such, it eliminates the significant level of noncash depreciation and amortization expense that results from the capital intensive nature of our businesses and intangible assets recognized in business combinations, and is unaffected by our capital structure or investment activities. Our Board uses this metric in evaluating our consolidated operating performance, and management

uses this metric to allocate resources and capital to our operating segments. We believe that operating cash flow is also useful to investors as a primary basis for comparing our operating performance with other companies in our industries, although our measure of operating cash flow may not be directly comparable to similar measures used by other companies. For these reasons, the Compensation Committee views this quantitative metric as the best overall measure of our performance that can be affected by the decision making of our named executive officers, and accordingly gave it a 60% weight.

 

As described above under “— Elements and Mix of Our Compensation Program — Cash Bonus Incentive Compensation,” in 2008 the Compensation Committee added free cash flow as an additional performance metric in achieving the target annual cash bonus for the named executive officers. In 2009, this metric was given a 30% weight. Free cash flow, which is a non-GAAP financial measure, is defined as “Net Cash Provided by Operating Activities” (as stated in our Consolidated Statement of Cash Flows), reduced by capital expenditures and cash paid for intangible assets, and adjusted for any payments related to certain nonoperating items, net of estimated tax benefits (such as income taxes on investment sales, and nonrecurring payments related to income tax and litigation contingencies of acquired companies). Free cash flow is used as an indicator of our ability to service and repay debt, make investments and return capital to investors through stock repurchases and dividends. It is also valued by investors as an additional measure that can be used to compare our performance with other companies. For these reasons, the Compensation Committee believes that free cash flow is a meaningful quantitative metric that also reflects the decision making of our named executive officers.

 

Also as described above under “— Elements and Mix of Our Compensation Program — Cash Bonus Incentive Compensation,” in 2009 the Compensation Committee added revenue as an additional performance metric and gave it a 10% weight. Revenue was added as a metric because of the importance of growing our businesses to continued success in achieving our business goals.

 

The Compensation Committee believes that measuring performance for our named executive officers using the same consolidated financial metrics (rather than individual performance goals tied to specific operating targets) is appropriate given the overall responsibility of the senior management team to deliver our most important performance goals for the year.

 

The Compensation Committee does not determine compensation levels, or condition incentive-based compensation award achievement, based directly on our stock price performance, because it believes that it is not equitable to condition performance rewards based on an external quantitative metric that management cannot directly control and to do so could lead to an undesirable focus on short-term results. However, as stated above, the Compensation Committee does review data comparing shareholder return performance to that of our peer group companies and does consider this information in setting compensation levels each year. In addition, because a material portion of compensation for each named executive officer is in the form of a stock-based vehicle, a significant portion of each named executive officer’s compensation is inherently tied to stock price movement and the achievement of shareholder value. As noted above, this is reflected in the significantly reduced value of outstanding equity-based awards of the named executive officers, especially stock options, as a result of the substantial drop in the market price of our common stock in 2007.

 

Emphasis on Long-Term Stock Ownership

 

Vesting of Equity-Based Incentive Compensation.  The Compensation Committee seeks to achieve the long-term objectives of equity compensation in part by extending the vesting period for options over a longer time period than is the case with most other large public companies. For example, with respect to the stock options granted to our named executive officers during the last several years, including 2009, one-half of the options vest over five years and one-half vest over a period of nine years and six months (and there is no vesting over the first two years). RSUs granted to our named executive officers during the last several years, including 2009, generally vest 15% on each of the first four anniversaries of the date of grant and 40% on the fifth anniversary. The Compensation Committee believes that these longer time-frame (and in the case of RSUs, back-end loaded) vesting schedules focus the named executive officers over the long term on the creation of shareholder value.

Stock Ownership Guidelines.  We have a stock ownership policy for members of our senior management, including our named executive officers. Under the current guidelines established by the Compensation Committee, Mr. Roberts is expected to own our stock in an amount equal to at least five times base salary. The other named executive officers are expected to own our stock in amounts ranging from one and a half to three times base salary. This policy is designed to increase the named executive officers’ ownership stakes and align their interests with the interests of shareholders. “Ownership” for purposes of this policy is defined to include stock owned directly or indirectly by the named executive officer and shares credited to the named executive officer under our employee stock purchase plan, which must be held for 180 days from the date credited. In addition, 60% of each of the following types of ownership also counts: shares owned under our 401(k) plan, deferred vested shares under our restricted stock plan, the amount of the stock fund under our deferred compensation plan and the difference between the market price and exercise price of vested stock options. In determining compliance, the Compensation Committee may take into account any noncompliance that occurs solely or primarily as a result of a decline in the market price of our stock. All of our named executive officers have been deemed to satisfy the requirements of our stock ownership policy as of December 31, 2009. In the event a subject employee is not in compliance, he or she is prohibited from selling our stock (unless a hardship exemption is granted).

 

Policies Regarding Hedging.  Our policy prohibits any named executive officer from buying or selling any of our securities or options or derivatives with respect to our securities without obtaining prior approval from our General Counsel. This seeks to assure that the named executive officers will not trade in our securities at a time when they are in possession of inside information. We do not have a policy that specifically prohibits our named executive officers from hedging the economic risk of stock ownership. However, federal securities laws generally prohibit our named executive officers from selling “short” our stock.

 

Tax and Accounting Considerations

 

The Compensation Committee periodically reviews our compensation practices for purposes of obtaining the maximum tax deductibility of compensation paid, consistent with our employment agreements and related contractual commitments. For example, as described above under “— Elements and Mix of Our Compensation Program — Equity-Based Incentive Compensation,” we include a performance condition in RSU awards to our named executive officers as a means of obtaining tax deductibility for their value. From time to time, the Compensation Committee has awarded, and may in the future award, compensation that is not fully deductible if it determines that such award is consistent with its philosophy and is in our and our shareholders’ best interests. Our employment agreements with our named executive officers seek to ensure that any compensation that could be characterized as nonqualified deferred compensation complies with Section 409A of the Internal Revenue Code.

 

The Compensation Committee also considers the accounting treatment of compensation elements in determining types and levels of compensation for our named executive officers.

 

Other Considerations

 

The Compensation Committee has historically viewed material increases in the size and scope of our operations as a basis for material increases in compensation levels. This occurred in 2002 following our AT&T Broadband acquisition, which almost tripled the size of our cable operations, making us the nation’s largest video services provider. As described above under “— Elements and Mix of Our Compensation Program,” this also occurred in December 2009 in connection with entering into new employment agreements with Messrs. Angelakis, Burke and Block following the announcement of the NBCU Transaction.

 

The Compensation Committee reviews, but does not give significant weight to, aggregate amounts realized or realizable from prior years’ compensation when making decisions regarding current compensation (what some commentators call an “accumulated wealth analysis”). As stated above, the Compensation Committee believes that in order to maintain the best group of executives to lead us, we need to provide a compensation package each year that is strongly competitive with the marketplace. High quality executive

talent with the experience and capabilities sought by us is scarce. The Compensation Committee is strongly of the view that it is an unnecessary risk to shareholder value to not provide a competitive level of compensation to our named executive officers each year. It believes that value realized on prior years’ compensation from stock appreciation is the reward for the named executive officer’s work over that period and the achievement of our long-term goals. To reduce current year compensation below competitive levels because a named executive officer has realized gains based on achievement of prior year goals or a desired increase in shareholder value is seen by the Compensation Committee as counterproductive.

 

The Compensation Committee is aware that our Chairman and Chief Executive Officer, Mr. Brian L. Roberts, is a son of our founder and director, Mr. Ralph J. Roberts, and is our shareholder with the greatest beneficial voting power. The Compensation Committee maintains an objective stance toward Mr. Brian L. Roberts’ compensation. The Compensation Committee uses the same methods, tools and processes to determine Mr. Roberts’ compensation as it does for our other named executive officers.

 

Recoupment Policy.  In 2007, upon the recommendation of the Compensation Committee and the Governance and Directors Nominating Committee, our Board adopted an incentive compensation recoupment policy. It provides that if it is determined by our Board that gross negligence, intentional misconduct or fraud by one of our executive officers or former executive officers caused or partially caused the restatement of all or a portion of our financial statements, the Board, in its sole discretion, may, to the extent permitted by law and our benefit plans, policies and agreements, and to the extent it determines in its sole judgment that it is in our best interests to do so, require repayment of all or a portion of any annual cash bonus, vested RSU or other incentive-based compensation paid to such executive officer or former executive officer (and/or effect the cancellation of unvested RSUs) if: (i) the amount or vesting of the incentive-based compensation was calculated based upon, or contingent on, the achievement of financial or operating results that were the subject of or affected by the restatement; and (ii) the amount or vesting of the incentive-based compensation would have been less had the financial statements been correct.

 

We, the members of the Compensation Committee of the Board of Directors, have reviewed and discussed with management the Compensation Discussion and Analysis. Based on this review and discussion, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

 

Members of the Compensation Committee

 

Dr. Judith Rodin (Chair)

S. Decker Anstrom

Joseph J. Collins

Michael I. Sovern

 

No member of the Compensation Committee is or was during 2009 an employee, or is or ever has been an officer, of our company. None of our executive officers has served during 2009 as a director or a member of the compensation committee of another company, one of whose executive officers serves as a member of our Board or Compensation Committee.

 

The following table sets forth specified information regarding the compensation for 2009, 2008 and 2007 of our Chairman of the Board, President and Chief Executive Officer (Mr. Brian L. Roberts), our Executive Vice President and Chief Financial Officer (Mr. Michael J. Angelakis) and our next three most highly compensated executive officers (Messrs. Stephen B. Burke, David L. Cohen and Arthur R. Block), except as set forth in footnote (10) to this table. We refer to these individuals as our named executive officers, as described above in “Compensation Discussion and Analysis — Our Named Executive Officers for 2009.”

 

 

 

 

The following table provides information about equity and nonequity awards granted to our named executive officers in 2009, as follows: (1) the grant date for equity awards (column (a)); (2) the estimated future payouts under nonequity incentive plan awards (columns (b), (c) and (d)); (3) the estimated future payouts under equity incentive plan awards, which consist of performance-based RSUs (columns (e), (f) and (g)); (4) all option awards, which consist of the number of shares underlying stock options (column (h)); (5) the exercise price of the stock option awards, which reflects the closing price of our Class A common stock on the date of grant (column (i)); and (6) the grant date fair value of each equity award computed in accordance with FASB ASC Topic 718 (column (j)).

 

 

 

 

The following table provides information on the holdings of stock option and stock awards by our named executive officers as of December 31, 2009. This table includes unexercised vested and unvested stock options (see columns (a), (b), (c) and (d)), unvested RSUs (see columns (e) and (f)) and unvested performance-based RSUs (see columns (g) and (h)). The vesting schedules for these grants are disclosed in the footnotes to this table. The market value of stock awards is based on the closing market price of a share of our Class A common stock as of December 31, 2009, or $16.86. The performance-based RSUs are subject to achieving specified increases in consolidated operating cash flow or free cash flow, as described in further detail above in “Compensation Discussion and Analysis — Elements and Mix of our Compensation Program — Equity-Based Incentive Compensation.”